Swiss police are investigating a crash in which a pensioner was seriously injured when his car was hit by a Lamborghini sports car being driven by a young Russian man who was allegedly racing three others along the banks of Lake Geneva.

The driver of the Lamborghini Murciélago was one of a group who set off from a Geneva hotel at 11.20pm last Thursday in four luxury cars including a €1.4m (£1.2m) Bugatti Veyron. They were said to have driven at speeds in excess of 124mph on the road between Geneva and Lausanne.

According to Swiss police, the drivers were frantically overtaking each other. "It was like a grand prix," one witness said. The unnamed 22-year-old driver of the Lamborghini eventually ploughed into a VW Golf, pitching it 50 metres across the road. Its driver, a 70-year-old German pensioner, was severely injured in the crash.

The Russian was said to have then staggered out of his wrecked car, after which his friends picked him up and fled the scene. Police later arrested all four drivers. According to the Swiss newspaper Tribune de Genéve, tests showed that the driver of the Lamborghini was drunk.

The case has thrown a spotlight on Russia's so-called "golden youth" – the children of Russian politicians, diplomats and mega-rich oligarchs. Today Moscow's newspapers pondered why these young Russians were so much more appalling than their western counterparts.

Dmitry Rogozin – Moscow's outspoken ambassador to Nato – said that the reported antics of the four young Russians had severely dented the country's reputation abroad. "The first generation of our 'new Russians' are behaving like complete prats," he told the TV station Vesti-24 today. "We are talking about a golden generation who are not embarrassed to spend €100 on a cup of tea, or order a risotto costing €300," he added.

Rogozin said the behaviour of rich Russians who descend every year on the French ski resort of Courchevel during New Year was now so embarrassing that all the other foreigners run away.

"Our [countrymen] love anything glamorous, anything expensive and anything shiny," he lamented. "The offspring of our top-ranking bureaucrats and millionaires behave in exactly the same way in Courchevel as those who had the car accident."

Switzerland has long been a favourite playground for affluent Russians – as well as for Lenin who lived in exile there in the years immediately before the Bolshevik Revolution. Many Russian diplomats live and work in Switzerland. The country is also a popular destination for Russians seeking medical treatment, and a place to hide their money.

Many wealthy Russians send their children to expensive private Swiss schools. Their aim is not just to secure an advantageous education for their sons and daughters but also to get their hands on a Swiss passport – which is granted more rapidly to under-18s from overseas in full-time Swiss education.

Swiss police said the Lamborghini driver was recovering in hospital. Officials say he has a residence permit for the canton of Geneva. His friends were apparently visiting from Russia.